We provided management consulting and project management services in support of Joint Logistic Unit – West, a logistics organisation supporting the Australian Defence Force in Western Australia. Joint Logistic Unit – West required assistance with the development and implementation of a performance management system.

Our Approach/Solution – We began the project with an assessment of the current performance management system in order to establish a baseline and determine the activities and resources required for the project. The initial assessment included the following major deliverables:

• Project Brief – provided a high level summary of the project.
• Business Case – described the current situation and provided justification for resource expenditure.
• Organisation and Responsibilities – documented the project management organization and responsibilities.
• Project Plan – identified and defined the major products, activities, effort, time scales, risks and resource costs.

We conducted interviews with key executives and a document audit to assess the current performance measurement framework and the systems used to facilitate decision and control processes. Our audit showed that improvement activities in the Joint Logistic Unit – West business plan were not driven by performance data. Measurement in the business plan occurred at a task level with no measurement of performance at an objective level. We found there were two sets of Key Performance Indicators – those reported to Joint Logistic Command and others developed at a local level. There was also a disconnect between performance data reported, the actual data used to make decisions, and the Joint Logistic Unit – West business plan. Without linkages, the ‘look and feel’ of the system was one of a reporting system, not a strategic management system.

The second stage of the project involved the development of a business model to describe the suppliers, inputs (resources), core processes (levels 1, 2 and 3), supporting processes, outputs, customers and outcomes of Joint Logistic Unit – West. Refinement of the Joint Logistic Unit – West business model helped to distinguish processes that address corporate governance, and the outputs and outcomes delivered to the customer. The model was used to identify key areas for the development of key performance indicators, and to provide a framework to link performance indicators and business planning. The model concentrated improvement efforts on internal processes that had the most impact on external customer satisfaction, used the majority of internal resources and had the capacity to influence the effectiveness of a large number of downstream activities.

Stage three of the project involved the delivery of a performance management system, including the development of performance indicators, the establishment of agreed performance levels with customers and stakeholders, the implementation of a data collection and reporting system, and development of decision-making mechanisms to allow Joint Logistic Unit – West executives to meet their corporate governance responsibilities. We conducted a customer needs analysis and also facilitated a two-day business planning conference for Joint Logistic Unit – West. This stage of the project included the following major deliverables:

• Strategy Map describing the cause and effect relationship between Joint Logistic Unit – West objectives.
• Key Performance Indicator Scorecard identifying key performance indicators and targets.
• Activity Brief describing in detail the background, scope, constraints, benefits, reporting, resources, timing (milestones), business risks, project risks and responsibilities for each improvement activity in the business plan.
• Data Collection and Reporting System describing the display, reporting and review frameworks for all key performance indicators.
• Governance Plan capturing the decision-making mechanisms for improving performance and meeting corporate governance responsibilities.
• Implementation Plan identifying the steps required to complete implementation and evaluate the performance management system.

We provided an “end-to-end” service and brought the capabilities to help Joint Logistic Unit – West with analysis, implementation and evaluation. Our staff worked closely with Joint Logistic Unit – West to transfer knowledge and techniques. Solutions to business problems were developed in partnership, and owned and implemented by the employees.

Results and Benefits – As a result of our approaches, Joint Logistic Unit – West now has an integrated performance measurement and planning system. Our approach:

• Focused the whole organization on the needs of customers, staff and other groups with a stake in the success of Joint Logistic Unit – West.
• Ensured the business plan was linked to higher order plans.
• Provided managers with clear information on which to act.
• Aided strategic planning and resource allocation.
• Simplified data collection and presentation.
• Provided a systematic approach to deploying and communicating strategic directions.
• Provided a structure for developing and implementing an efficient and effective performance measurement system.
• Was integrated with existing planning and improvement processes.

Benefits to Joint Logistic Unit – West included:

• Providing measures to focus strategic direction.
• Improving links between planning, actions and processes.
• Aligning employees’ actions with the strategic purpose of the organization.
• Improving reporting processes.
• Defining accountabilities and responsibilities to aid performance management.
• Developing a focus on what areas needed to be managed.

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